completion of a “Course research project” which is similar to a research paper but requires calculations and analysis of financial figures for a selected health care organization. For your course project, I expect you to obtain the needed financial statements for a health care provider or supplier organization, either not for profit (this is preferred), or for profit, make the following calculations and perform a financial trend analysis of the data. In other words, are the trends positive or negative and why do you think they are happening?
1.) Return on Equity (ROE)
2.) Total Margin
3.) Days Cash on Hand
4.) Days in Accounts Receivable
5.) Average Age of Plant
6.) Long Term Debt to Equity %
7.) Labor Productivity – Net Patient or Sales Revenue per FTE
8.) Earnings before interest, taxes, depreciation, and amortization (EBITDA)
9.) Value of their property tax exemption (see Table 5-5, p 121 for how to
calculate this. Assume the same 35% assessment percentage and estimated
tax rate of 7%. Note, if you have chosen a for-profit, find their
payments for property taxes in the two years under study.
calculate the above ratios and values for two different
years and analyze the financial trends. By analysis, I mean explaining why the changes are occurring, not just describing the changes. This requires you to examine what is happening with the organization’s revenues and expenses and to do some thinking about what is affecting revenue and expense. Also, you will need to compare your results with benchmark data found in Table 12-3 and/or any other national benchmarks you might be able to find. The years analyzed need be the latest ones that you
can obtain from the financial statements available.